CALGARY — Canadian drilling activity will ramp up in the latter part of 2013 but the number of wells will be only slightly higher than this year, an industry group predicts.

In its annual forecast, the Calgary-based Petroleum Services Association of Canada says 11,400 wells will be drilled in 2013, up from the expected final tally of 11,250 wells in 2012.

“These well counts may not sound considerable, but when you put them in the context of the activity in 2009, well counts are up over 32 per cent,” said PSAC president Mark Salkeld at a news conference on Tuesday.

“For 2013, we are forecasting a continued increase in oil — we’re projecting that 87 per cent of wells drilled will be oil wells. Gas wells will only be drilled as needed ... with high storage levels going into winter.”

A year ago, PSAC predicted 15,100 wells would be drilled in 2012, up from a total of 13,700 wells in 2011.

It chopped that number in January to 13,350 as natural gas prices fell to 10-year lows, then cut it again in July to 12,500 as global economic uncertainty and lower oil prices made it difficult for companies to raise cash.

Kevin Lo, a services analyst for FirstEnergy Capital Corp., said he’s predicting 12,200 wells for 2013, up from 11,200 this year, but that “may be a bit aggressive” given the weakness of drilling in the third quarter and will likely be reduced.

PSAC said it expects increased activity mainly in the second half of 2013 as larger producers continue their plans and mid-sized companies gain better access to capital.

Lo said he agrees activity will rise starting next fall based on a projected increase in North American natural gas prices.

Outgoing PSAC chairman Mike Edmonds, who is being replaced by Lucas Mezzano, pointed out at the conference that about 70 per cent of the wells in 2013 are expected to be horizontal wells, which are much longer than vertical wells, and the total of 22 million metres of drilling depth will be about equal to 2008, when 16,933 wells were drilled.

The PSAC forecast is based on an average Alberta natural gas price of $3.25 per thousand cubic feet at AECO and an average New York benchmark crude oil price of $95 US per barrel.

On a provincial basis, PSAC predicts slight increases in drilling in Alberta (up three per cent at 7,045 wells) and Manitoba (up five per cent to 750).

British Columbia activity, mainly gas related, is expected to fall 11 per cent to 385 wells and Saskatchewan is expected to be down one per cent at 3,199 wells.

Salkeld said the slower pace of drilling will help the industry with its labour shortage issues, adding he doesn’t think the industry is oversupplied with equipment after optimistic initial forecasts last year.

“The industry is changing,” he said. “Is there equipment sitting? Yes. Is it overbuilt? No. We could have a ramp up in activity and labour would be the bottleneck ... it’s a nice balance and we’ve kind of grown into this position.”

In a research note Tuesday, Martin King, commodity analyst for FirstEnergy, said Western Canada’s natural gas output in October averaged 13.3 billion cubic feet per day.

“This is the highest monthly average natural gas fuel supply seen from the WCSB (Western Canadian Sedimentary Basin) since May 2012, yet it still represents year-over-year supply losses of around 920 million cf/d,” he pointed out.

He noted AECO prices averaged $3.07 per mcf in October.

Peters & Co. said in a recent services industry forecast that it expects oilfield activity in Canada to be about the same in 2013 as it was in 2012.

PSAC represents over 250 member companies, employing more than 65,000 people.